What do we do with a 140k inheritance?

September 11, 2009 1:39 PM

We live in San Diego. We have 140k in cash after an inheritance, a mobile home we can't afford, crappy jobs, and have never had this much money ever. How do we best invest this money?

My husband and I grew up in San Diego - it's expensive, the schools are terrible... but there's lots of parks, great beaches, and we have good friends here. We're 22+23 - he's in college double time for massage therapy and I'm working as an admin/personal assistant. Right now, we're the usual poor college students - I pull in about 20k a year after taxes.

The Good: We have no debt except for his school which is a $400 a month payment debited from our account. There's 8k left on his school. We're both healthy, have a huge mobile home that was also left to us, no kids. We used part of the money to get a reliable car, so that's not a problem.

The Bad: We live in one of the worst neighborhoods in town, paying $700-900 space rent + utilities on the mobile home. We both have to drive about an hour each way for work/school. We have no health insurance, and after bringing all our debts to the bare minimum, we're still in the hole 600 every month. We have someone moving into the extra bedroom soon, but that will only let us break even. We doubt we'll be able to sell the house, because there's a dozen others for sale that haven't sold, including one across from us for 29k, which is cheaper than some cars.

Our options, so far, seem to be buy a house in a crappy/still far away area (El Cajon, Lakeside, City Heights) which would use up all our saved up money, or rent a place (presumably prepaying the rent, because we just don't have credit histories), get a second car, and invest the rest in retirement/savings and making our lives better (buying clothes for once in our lives, a second car). I checked some of the other inheritance posts, but none quite dealt with this large a sum.

posted by veritas to work & money (35 comments total)

Don't buy a house with no financial cushion at all. A leaking pipe could literally bankrupt you.

What is the last amount of money you could spend for a one bedroom apartment in a location that would work for you?
posted by DarlingBri at 1:53 PM on September 11

I would rent.

$140,000 in cash can go a long way in San Diego.

I definitely NOT buy real estate with the money as your financial condition at present is too precarious to finance the associated debt, event if the $140,000 allows for a sizeable downpayment.

I would also peruse the blog Get Rich Slowly.
posted by dfriedman at 1:53 PM on September 11 [1 favorite]

[First of all, I'm confused: do you have a mobile home AND a house, or do you refer to the mobile home as "the house"?]

My answer kind of depends on your self-control and ability to leave a savings account alone when nothing's stopping you from accessing it other than your own willpower. Assessing that will have to be your job since there's no way I can tell. But, if you think you can do it: I would put the money in interest-bearing savings accounts (split it in two and use two SEPARATE BANKS - no more than $100K in each*) and plan to leave the money there for at least one year.

During that year, consult at least a couple financial planners. Tell them how much you have and what your goals are (bigger house? More school? College for the kids-to-be?). Resist ALL entreaties from EVERYONE that you simply must put your money in XYZ investment right the hell now because OMG it's going to go up like 200% per year OMG! And there will be lots of people telling you this, at various levels of professionality. The purposes of setting it aside and waiting, getting some advice, are several:

• You don't want to make a decision when money is really new to you and you know almost nothing about handling it;
• If you're considering a certain investment or asset class, you should watch its performance for a while, see how much it varies, see how comfortable you are with this; and
• It gives you a chance to learn about these things safely, if you leave it aside in FDIC insured accounts.

In the meantime, continue to (try to) live within your means, and really figure out what your goals are. The one exception I would make to the above rule is to allow yourself a small monthly draw to meet predictable, fixed expenses such as his college tuition. This is only as an alternative to incurring debt, mind you - the ultimate goal is still to live within your means, and save this money to put towards a larger goal once you figure out what that is.

* Yes, 100K is the right number. From the FDIC website: "The standard insurance amount currently is $250,000 per depositor. The $250,000 limit is permanent for certain retirement accounts (includes IRAs) and is temporary for all other deposit accounts through December 31, 2013. On January 1, 2014, the standard insurance amount will return to $100,000 per depositor for all deposit accounts except certain retirement accounts, which will remain at $250,000 per depositor."
posted by rkent at 1:55 PM on September 11 [3 favorites]

Also confirm whether taxes have been paid on this inheritance.

I assume there is a lawyer or accountant who was involved in advising you as to how this inheritance affects your tax picture?

If you have not received any such advice this is the first thing to do.
posted by dfriedman at 1:55 PM on September 11 [1 favorite]

I think you kind of had the right idea already: "rent a place... get a second car, and invest the rest in retirement/savings and making our lives better"

I would say in addition:

1) Pay off all your debts, including the $8,000 remaining on his student loan immediately -- you're just losing money as you pay interest.

2) Don't buy a crappy house that you have no intention of living in. You can definitely rent an apartment with limited or no credit history, so that's a very very minor problem. There are plenty of 1 BR apartments in San Diego proper for $1000 - $1500 which you can more than afford with the money you have in the bank and would probably equal whatever maintenance and taxes you would have to pay on a house. How much money are you guys wasting on gas driving 2 hours x 2 each day? Has to be a few hundred dollars at least per month. In a few years you will presumably both be making income and should easily be able to continue to afford this amount of rent without dipping into your savings.

3) I would outright purchase a new 2nd car right now to avoid monthly payments and interest with a loan or lease. There are lots of great cars for under $20k.
posted by hamsterdam at 2:01 PM on September 11 [3 favorites]

So you've already dealt with the tax consequences of the inheritance and you are left with the $140k in cash. You should go on-line to Schwab, Prudential, Fidelity, or e-trade, and open a traditional and a Roth IRA for both you and your husband and make the maximum contributions to each (investing in some conservative mutual funds is best if you don't have a broker). I am not sure what the limits are anymore, but that will still not make a dent in your total cash.

Invest the rest in a reasonably safe mutual fund, now is a great time for that as the market is at historic lows, etc. I wouldn't try to do individual stocks if you don't know what you are doing. Over the next few years, continue making the maximum contributions to the retirement vehicles, so you can get the most favorable tax treatment on the returns from your investments.

Meanwhile, your husband is in school but you are not. If you are working as an admin making $20k per year, why don't you put yourself in school full-time for something you really want to to? The best return on your investment is always education. Lots of people borrow for school, so you have a great start, you don't even have to borrow.

Not sure about your housing situation and how that s/b influenced by your windfall, there are too many other considerations there, so no help.

Clothing, transportation, healthcare, and vacations are all important, but should be managed out of your regular cash flow, and not windfall type money if you can help it.

Good luck!
posted by Goodgrief at 2:02 PM on September 11 [1 favorite]

Clarifications:
The mobile home is "the house" - we only have one. We have paid all our taxes through the year (required for mobile home inheritances).

The money we have was from a life insurance account, handled through a trust, and the man in charge of the trust left us with no information or advice, though I am told that with life insurance disbursements, we will not have to pay taxes on it. Everything else we had taxes withheld on.

We currently have most of the money in an ING Direct savings account, with a small amount (3k) in checking for unexpected things. We've been really good about not touching it. Thank you so much for the advice - partly we're just feeling lost because we don't exactly have a financial planner we trust, etc.
posted by veritas at 2:04 PM on September 11

Oh, and sorry - we pay no interest on his school. It wasn't a loan - the school just held onto the post-dated checks and cashes them monthly.
posted by veritas at 2:06 PM on September 11

Find a good financial adviser, STAT. Paying a little extra money now (which you won't likely notice) will make your money work for you later. In fact, your adviser will possibly just earn commission from the investments, so you should do a little research and go with the best you can get.

Here's a brief guide to finding one. It goes over some useful trade orgs/certifications to know and talks about some tips like chatting with at least three people.

You should probably have a mix of things. I was in a similar situation a few years ago, and because I was still barely getting by as an office worker (with grad school as my only real goal), my planner wanted to make sure that I had a fair amount of cash that was easily accessible if I needed it. Then she diversified among the rest by placing some in higher-risk, bigger-payoff investments and some in safer ones. Even within those divisions, she spread it among several offerings. Remember that Bernie Madoff made such a horrible impact because he put millions of dollars in very few places (that were all sketchy).

Whatever you do, don't put it off. I had a wonderful visit with my planner (a family friend and just the nicest, smartest lady around) and all I had to do was send her a check made out the her securities people. I kept putting it off, and now I'm more or less back where I was before I had it. Granted, I did go to grad school mostly debt-free, but I probably would have been able to hold out longer and do some more things.

But I'm NOT sorry I had the opportunity to visit people, buy some quality things I still enjoy (clothes, a car, furniture) and generally not live like a pauper during grad school. I chose to keep myself and my brain happy during what could have been a high-stress time, and that was the best choice for me. Even the most hardcore people will tell you that you need to enjoy yourself while saving, or your money will start to rule your life. It's like dieting; unless you get the occasional treat that makes things worthwhile -- particularly a real one, not some cheap "guiltless" thing -- you'll hate the experience and go right back to your bad habits.

Good luck!
posted by Madamina at 2:06 PM on September 11 [2 favorites]

Ah. San Diego. I will never miss your deceptive attractions! I will never miss all the promises you made to me, the promises that never came true.

Number one, please do keep the news about your inheritance to yourselves. Money might not change you, but it will change people around you.

Your next smartest move is to ditch the roommate idea and move to a better neighborhood. The roommate is drama and headache and risk you do not need.

You can afford to move to a different neighborhood, so do that. This simple change will alter your perspective on your inheritance ENTIRELY. I propose you shouldn't make any big life decisions until you change your current environment. You are unhappy where you are and the commute sucks. It is fucking with your mind. You will make bad life choices until you get someplace where you can hear your hearts and let your imaginations work. Even your ideas about what is practical are currently colored by your poor living environment. Change this. Then figure out your future.

**If it were me (wait - it kinda was me!) I would finish school and get the fuck away from SD ASAP. You can do better. You have no idea what the world is about right now because you live in a hell hole populated by slackers, scam artists, drug addicts, alcoholics, plus the politically and intellectually immature. Run. Get someplace where folks experience consequences and weather. Just Run.**
posted by jbenben at 2:09 PM on September 11 [1 favorite]

(Geez, while I was typing everyone posted good things that helped me remember stuff :P)

Yes, get a good idea of your tax picture RIGHT NOW. Under no circumstances should you skimp on a good tax lawyer. I had a problem (all the IRS's fault) the year after my windfall, and he took the rap for it.

Also, see if you can prepay anything in the foreseeable future to get a discount.
posted by Madamina at 2:10 PM on September 11

I am a CA lawyer, although not yours.

Just wanted to clarify that within California and at the federal level there are no tax consquences of inheriting cash out of an estate. Estate tax, if it applies at all (based on the size of the estate), applies to the estate directly, not to the person receiving the inheritance.
posted by dbolll at 2:11 PM on September 11

First of all consider talking to a financial planner about this, because that is a lot of money and it's worth spending some money to get some professional advice about it. Specifically look for someone who is fee only, because in my opinion at least commissions create a serious conflict of interest.

Although 140k is certainly a lot of money, you and your husband are young and over the rest of your lives you will make enough money that this will be a small percentage of your total income. So make sure that you do not make any lifestyle changes that are unsustainable. For example, do not put down a downpayment for a house that you cannot currently afford the payments on and plan on coasting on the inheritance money until your husband finishes school. The main trick in being financially stable in the long run is just to live on less money than you take in every month and save the rest, regardless of what you do with the money you save.

As far as what you can do with your money, there aren't really any secret formulas, it's just a matter of long term investments versus short term investments. For short term investments, where you need money for a specific upcoming event or just for emergencies, a savings account is a completely safe investment that will get you about as good of returns as any other risk-free investment. Unfortunately do to the downturn in the economy, the interest rates are pretty low on savings accounts these days, but you can find the best rates available right now on the Bank Deals blog. Most people suggest keeping a few months worth of expenses (not income) in an accessible account at all times in case of emergencies.

For long term investments, which in your case is probably retirement savings for 30+ years from now, the stock market generally beats most other kinds of investments. In my opinion it's impossible to consistently beat the market by investing in specific stocks, so I would suggest investing in index funds, which is a low cost way to invest in many different stocks at once. Also, normally investment gains are taxed each year, but there are special retirement accounts like IRAs and 401ks that can gain returns tax free. A Roth IRA is normally a good idea for people you and your husband's age, but there are contribution limits involved so you'll need to check to see exactly how you can invest your inheritance in a retirement account without breaking any of the rules.
posted by burnmp3s at 2:14 PM on September 11 [1 favorite]

Madamina's advice to get a family planner is essential.
posted by jbenben at 2:14 PM on September 11

My suggestion, if I were in your shoes, would be this.

#1: Pay off the school loan. That increases your monthly available income by $400.

If that extra $400 a month allows you to afford your current rent, then you're good to go -- put the remaining money in a couple of CDs with 2% return and 12-month terms, while you both work to get better jobs. Meanwhile, verify you can afford to rent closer to where you are now, look at your current living situation, and consider changing it -- a significant commute reduction will lower your monthly gas costs and make you much less susceptible to financial and employment concerns related to car breakdowns.

If that extra $400 a month doesn't get you to rent, however...

#2: Set aside exactly two months' worth of money to cover your rent shortage, and spend the next two months concentrating on selling the place instead of worrying about the money. You may end up getting relatively little for the place, but it beats losing money every month, even if you ultimately have to give it away. Meanwhile, do everything else I describe above.
posted by davejay at 2:23 PM on September 11

Also confirm whether taxes have been paid on this inheritance.

California has no inheritance tax.

I'd recommend taking between $5K-10K and buying a CD or some other financial instrument that gets that money away from you for a year or two or five. I agree with the advice above to open a Roth IRA, even if it's just a $5K with $100/month in contributions.
posted by mattbucher at 2:25 PM on September 11

Oh, I see you're going to be in the hole $200 a month after paying off the loan. Okay, so that's not a lot, so there's hope.

Here's my revised battle plan, if I were you:

1. Pay off the loan. You're in the hole $200 now.

2. Set aside $1000 to cover your $200 hole for the next five months.

3. Put all but $10,000 of the remaining money into a 12-month CD at 2% or higher (you may have to search a bit, but they're out there.)

4. Put the $10,000 into a savings account, so that you have to travel to the bank to get it in emergencies (no debit card, no checks!)

5. Spend the next five months trying to sell the place. Take a lowball offer if you get one, because it may be "free" in the sense that you inherited it without a mortgage, but it is most definitely not free because you have to pay $700-$900 a month to use it.

6. Whatever money you make from the sale -- even if it's only $1000 -- use it to help cover your rent in the new place that you've found to live in, so that you don't have daily 2-hour commutes. Concentrate on getting better jobs or raises, so that when the money runs out, you'll have salaries that allow you to afford your new rent without self-subsidizing.

When all this is done, you should -- at minimum -- have $10,000 in savings for emergencies, and all the rest that's left (after paying the student loan and reserving the $10,000), plus the interest you've made on the CDs...which you keep re-opening as you need them.

If things go well for you over the next few years, you'll have better jobs that pay for some nice things, you'll be able to live better, and you'll still be living within your means. Then someday you'll have a huge down payment for a house (yay) or hospital bills (boo), but meanwhile live like you don't have that money.
posted by davejay at 2:31 PM on September 11 [3 favorites]

OK. And I just re-read your post. I wanted to see if I could figure out what neighborhood you were in exactly. I can't. But I did notice a few things.

#1 - You will have absolutely no troubles, NONE, finding an apartment to rent for the time-being. The fact that you think you could have troubles demonstrates to me that you don't have a great grasp on how things work. You have far more options and opportunities than you think.

Thought Experiment:

Pick the nicest neighborhood you can think of, someplace close to work and school. Guaranteed you can find a lovely one bedroom there in your price range. Go looking next week, just to see for yourself!

Renting is a great, inexpensive and temporary way for you to live someplace decent while you guys try to get your heads around your next few steps. Move. Rent. Enjoy.

#2 - Since you have the $140K, consider dumping the trailer home for dirt cheap, price it to sell. You don't need the extra money, and you don't need the headache of subletting it. It's a distraction.

#3. The real reason I wanted to write once more;)) - I suspect since your husband is in massage school that he's traveling daily to someplace like PB. Uh, please don't move to PB. Instead, pick a neighborhood with a more professional vibe.

You guys are young and you have aspirations. Go get 'em! Put yourself someplace where other folks are doing same - it will help you get to your ultimate goals.

OK. I'm done. Good luck.
posted by jbenben at 2:33 PM on September 11

including one across from us for 29k, which is cheaper than some cars

That's money that you currently don't have. If you're not planning on living there or renting it out, I'd sell it for whatever you can get. Otherwise, you'll have to maintain it, make sure it doesn't get broken into or turned into a meth lab, etc.
posted by hwyengr at 2:37 PM on September 11 [1 favorite]

Okay, battle plan so far (thank you so much for all the great suggestions):

1. Paying off the school debt
2. Have a consultation appointment with three tax planners/financial advisors, so we can pick one, and begin really planning.
3. Setting aside 10k in our savings account - as it takes 3 days just to clear to our checking account, I figure that's as good as having to drive there.
4. Opening an IRA in each of our names, and then (if we can?) opening a joint IRA. Max contributions to all.
5. Vacating the house, putting it up for sale, taking the first possible offer.
6. Renting a house, likely in Mira Mesa/Sorrento Valley (where I work) or within biking distance of his school (near Fry's by the 8). We're considering pre-paying for 6 months, but turning around and taking our paychecks and putting it into CDs (about $6000+).
7. Buying a cheap car. We have a Prius, so the second car just needs to be reliable and sturdy - we will likely go used.
8. Not spending outside of our paychecks (we do this already, except for one month with an unexpected vet bill).
posted by veritas at 2:57 PM on September 11 [2 favorites]

One thing you may want to consider when looking for a place to rent is trying to negotiate a discount on the rent if you pay a year's rent up front.

Example: if the listed rent is $1,000 per month, offer them $950 per month, payable up front. The landlord may bite if the San Diego rental market is bad, which I would guess it is.

Of course, this only works if you feel reasonably confident that the landlord is responsive to maintenance issues. Otherwise you might as well just pay rent monthly in order that you can withhold rent if the landlord becomes derelict in his responsibilities.
posted by dfriedman at 3:19 PM on September 11

I'd bet he's going to IPSB. Unfortunately, it seems like every CMT I meet is somewhat struggling financially; hope he won't be. The plus side is that I'd bet San Diego has a larger than normal demand for massage.

I actually work near there, and bike to work incidentally. I'd recommend finding a place in Clairemont. It's quite central, and it's going to be more affordable than many other areas. I'd bet it's easily cheaper than somewhere in Sorrento Valley. Mira Mesa has some deals I'd bet, but I'd personally stay far away because the traffic is awful; high population density and a seeming lack of good traffic flow.

You mention paying off the school debt--if it is not accruing interest don't bother. It seems this is the case from your previous response, but I'm not sure that's what you meant. If paying it early saves money do so; otherwise simply keep the money around for it. ING Direct lets you make subaccounts in their accounts; I'd just drop the $8k in something like that.

If you don't like the location of the mobile home, sell the place and move somewhere that you do. I'd say you should look into renting if you had a normal house. But since you don't own the land, it seems like what you do own is a depreciating asset (like a car) rather than a (generally) appreciating one like land. So the longer you hold onto that home, the cheaper it sells for. [I would think. I am not a mobile home expert.] So get rid of it. Try to advertise better than the other guys trying to sell; are they just putting up a sign? Note that it sounds like you're sort of in a good position with regards to the sale of the mobile home: you don't crucially need to meet a certain price, and you're somewhat financially stable (not underwater on the loan or something). That gives you some flexibility.

Keep in mind that $100k at 7% interest for 35 years is over one million dollars.

Sounds like you're going about this the right way. Make sure you are spending less than you make, have an emergency fund, and invest the rest. Give me a mail if you need more San Diego-specific info.
posted by RikiTikiTavi at 3:52 PM on September 11

You know, that's funny RikiTikiTavi, and I mean absolutely no disrespect - but I think would advise against Clairemont because I lived there for a while and I found it to be a bit depressing. Little Italy might be really great. Or the area right around Balboa Park. Even parts of La Jolla. Coronado would be excellent, although it might not solve the commuting issue;) Rents are super super affordable everywhere right now and they really do have their pick. But talk about neighborhoods is actually a bit off-topic and I apologize...

The reason I wrote so many times to this ask.me thread is this:

I sensed a certain hopelessness in the original ask that seemed inappropriate to the circumstances described. The hopelessness I sensed seemed so frighteningly familiar, so particularly San Diego.

Don't get me wrong. There are things I love love love about San Diego. Good times. But there can be this disturbing undercurrent, perhaps a certain ennui that permeates people's vibe? It is the type of thing I witnessed holding a lot of people back when I lived there.

veritas -- Best of luck. You and your husband seem lovely and hardworking. You're both young, you have each other, your health, jobs, goals, and a small boatload of cash. You have brains enough to be cautious in how you responsibly handle this large sum of money. There is nothing holding you back. Good for you guys!

(and just in case you had that "thing" I witnessed so often in people when I lived in SD, well, I hope now that you don't;)
posted by jbenben at 5:58 PM on September 11

Consider getting a high deductible insurance policy. My son your age has one for 30$ a month. It will save you from having to spend that 140 on unexpected medical catastrophe. Then, as a good financial plan spend a little extra each month for quality nutritious food. The extra money you spend will be saved 10 fold by preventing illness. Good nutrition is one of the most important financial decisions you will make. When I buy fresh fruit or fresh fish I always think of it as buying my own kind of health insurance. Investing in myself.
posted by cda at 5:59 PM on September 11

Could you rent out the mobile home and live in a (rented) apartment closer into town? I know that having renters can be a hassle, but it would be a way to make some money off of the mobile home until the market is better for selling.

I would also encourage you to buy health insurance.
posted by ishotjr at 6:06 PM on September 11

Get a fee-based financial planner. Consider moving somewhere cheap (outside the US) where the currency exchange rate works for you. Invest the majority of your funds based on the financial planner's advice, saving some for educations to increase your earning power.
posted by arimathea at 6:09 PM on September 11

Seconding getting out of California.
posted by mecran01 at 7:34 PM on September 11

I would say CDs are a great start for early investing as they are safe and teach you some techniques that will be important for future investing. A good CD technique is laddering and I suggest you look into this as it helps you lock in rates as interest rates rise and maintain some liquidity to your investment while still maintaining discipline.

Ladders
posted by occidental at 8:14 PM on September 11

I'm hearing lots of advice to leave California. Whether you do or not, you may want to check out houses on a site I just discovered. Believe it or not, there are a lot of totally nice and liveable (not all fixer-uppers) here: http://www.disasterhousing.gov/homes/index.cfm. The name in the URL is a bit misleading because they are not disaster houses.

For instance, I found several great houses in New York State for under $25,000. I'm going to go look up California just out of curiosity after reading this post. I once lived in San Diego, loved it, went to grad school at SDSU, enjoyed my time there, but wouldn't ever move back. I've traveled the 48 states, so you should know there are a lot of options out there.

I second the advice on CDs because they're safe and getting them for a certain period of time may make you less likely to touch the money. You could use the interest alone to stay out of the hole every month.

Good Luck!
posted by VC Drake at 8:51 PM on September 11

I'm not sure I would accept the first on the mobile, but I would definitely sell it and price it very sharply. If the next lowest is $29K, put yours up for $20K and be prepared to accept 15. Or whatever.

Do take this as an opportunity to think about how your lives could change because of this windfall. You're young, and if you've dreamed of living elsewhere or whatever, this money, carefully shepherded, could give you that opportunity, whether now or a few years down the road.

I think rkent has the bext advice in this thread. Plan on not touching this for a year, and I bet in that year you can educate yourselves to the point that you don't need a financial planner if all you would like to do is invest it conservatively. It would definitely be worth talking to a few, but don't give up on the idea of managing it yourself; just know what your limitations are.
posted by maxwelton at 11:46 PM on September 11 [1 favorite]

The first rule of financial advice is to beware of financial advice. That being said...

Coming into a wad of money, in your position, I think you've taken the right approach so far, which is to slow things down and take your time. Get comfortable with it; you don't have to go "put the money to work" right away, or sweat making 1% instead of 2% interest - don't let it become a burden to you. Don't think you have to "spend money to make money" with advisers and stock investments, and don't turn it into a game. Also be wary of living beyond your income, because it's hard to go back.

I'd consider pay off the 8k debt right away, since what would be the point of making 1% on 8k in the bank if you're losing 5% in interest on the same amount in loans (well, it does help improve your credit score... if it's a 2% loan or something low, consider paying it off over time).

As others said, you SHOULD spend it on improving your day to day life - it sounds like you hate your mobile home, so go rent an apartment in a better area. Put the mobile home up for sale. If it takes a year to sell, or if you don't make as much as you'd like from it, don't worry too much - consider selling the mobile home part of the freedom your money buys you. Don't live there out of obligation; cash it in and upgrade your life in smart, deliberate ways and you'll be fine.
posted by lubujackson at 12:22 AM on September 12 [1 favorite]

Keep in mind that $100k at 7% interest for 35 years is over one million dollars.
While that is not specific advise, this is probably the single most important bit of information you've been given. Thirty-five years seems like a long way off, and there will be many things you will want to buy in the next 35 years, but just look at the power of time on your money. I would print that statement out in big, bold letters and tape it to your refrigerator for daily contemplation.
posted by Houstonian at 4:13 AM on September 12

that's funny RikiTikiTavi, and I mean absolutely no disrespect - but I think would advise against Clairemont because I lived there for a while and I found it to be a bit depressing.

No problem--each to his own and all that. I suppose it depends what you're looking for. You aren't going to get, say, a cool urban experience very far out of downtown in this city. Personally, I think any area of any town could be depressing for its own reasons.

The hopelessness I sensed seemed so frighteningly familiar, so particularly San Diego.

That's probably because of the disparity between cost of living vs. average income here. :-|
posted by RikiTikiTavi at 1:03 PM on September 12

Hey RikiTikiTavi - thanks for responding! I think it's really cool of you:)

Precisely. I concur with your assessment of neighborhoods and the experiences they offer.

I tailored my input on this thread very specifically to the OP - she indicates they are early 20's, in school and with employment, native to SD, and currently living in unhappy circumstances. In a trailer park.

I've been to some cool trailer parks around SD that were really nice. Mostly, elderly folk lived there. I've been to some sad trailer parks near same filled with mixed ages. Either way, I wouldn't call either type of environment conducive to attaining your goals (especially ones you haven't yet thought of!)

My interpretation of the mindset the OP and her husband may have dovetails into your next comment...

"That's probably because of the disparity between cost of living vs. average income here. :-|"

Oh my. Don't get me started.

(Living costs in SD are fairly affordable, especially compared to NYC, SF or London, at any rate. But the disparity between social strata and cultural opportunities are almost incalculable and completely endemic to the area. A bizarre mix of beach town+military town+border town+college town+monied folk relying on cheap labor (illegal or legal immigrants? see: border town) = Pretty facade & sad opportunities for the regular population. See? Told you not to get me started. Sorry.)

I LOVED VC Drake's comments, "I once lived in San Diego, loved it, went to grad school at SDSU, enjoyed my time there, but wouldn't ever move back. I've traveled the 48 states, so you should know there are a lot of options out there."

I nth my own advice above that it would be preferable they make the bigger decisions once the couple in question has moved to a happier environment. Double nthing living within a professional vibe for the time being, as they directly indicate similar of aspiration with the mere content of their ask!

I honor fully the idea that you should make the most of any blessing.

Great ask. Great interaction upon the details.
posted by jbenben at 6:38 PM on September 12

Others have given good advice on most of the rest, but I have to emphasize: get yourselves some health insurance. Catastrophic coverage at the very least. Otherwise you're just gambling with that money and a bit of bad luck could make it disappear.
posted by EmilyClimbs at 8:06 PM on September 12